The Labor Department reported on Wednesday that the US economy produced 818,000 fewer jobs April 2023 to March 2024 than initial calculations suggested.

The total payrolls revision of 0.5% – the most substantial decline since 2009 – was nearly 30% less than the 2.9 million originally reported.

The Bureau of Labor Statistics' revisions came after the agency analyzed data from the quarterly Census of Employment and Wages, part of an annual process that occasionally reveals departures from monthly updates.

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“The revisions are not a shock, given estimates of a million fewer jobs,” Robert Frick, corporate economist with Navy Federal Credit Union, said in a note. according to Bloomberg. “This does not challenge the idea that we are still in an expansion, but signals that we should expect monthly job growth to be more muted and put additional pressure on the Fed to cut rates.”

Related: CPI report: Inflation hits 3-year low, analysts predict Fed will cut rates next month

The revisions resonated across sectors, including professional and business services, which saw job growth down by 358,000. Leisure and hospitality, manufacturing and trade, transport and utilities also faced significant downward corrections.

Meanwhile, Federal Reserve Chairman Jerome Powell's upcoming speech in Wyoming is being watched closely for any hint of monetary easing, especially with a rate cut expected in September.

“The labor market looks weaker than first reported,” Jeffrey Roach, chief economist at LPL Financial, told CNBC. “A deteriorating labor market will allow the Fed to play out both sides of the dual mandate, and investors should expect the Fed to prepare markets for a cut at the September meeting.”

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